The productivity-wage relationship in South Africa: an empirical investigation

Jeremy Wakeford

Development Southern Africa, 2004, vol. 21, issue 1, 109-132

Abstract: This article investigates the relationship between labour productivity, average real wages and the unemployment rate in South Africa at the macroeconomic level, using time-series econometric techniques. There is strong evidence of a structural break in 1990, after which time all three variables rose rapidly. The break appears to have negatively affected the level of employment in the first instance, and subsequently fed through into per worker wages and productivity. A long-term equilibrium (cointegrating) relationship was found between real wages and productivity, but unemployment was apparently unconnected to the system, which lends support to the insider-outsider theory. A long-term wage-productivity elasticity of 0,58 indicates that productivity has grown more rapidly than wages, which is consistent with the finding that labour's share of gross output has been shrinking over the past decade. These trends may be explained plausibly by the adoption of job-shedding technology and capital intensification.

Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/0376835042000181444 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:deveza:v:21:y:2004:i:1:p:109-132

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CDSA20

DOI: 10.1080/0376835042000181444

Access Statistics for this article

Development Southern Africa is currently edited by Marie Kirsten

More articles in Development Southern Africa from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().